Chancellor Angela Merkel would rather see the UK exit from the European Union than compromise over the principle of free movement of workers, according to the German magazine Der Spiegel.

Mrs Merkel is alleged to fear that the UK is approaching a "point of no return".

Downing Street would not comment on the reports.

Mr Cameron wants to renegotiate the terms of the UK's continued membership before holding an in-out referendum.

The prime minister said that freedom of movement would be "at the very heart of my renegotiation strategy for Europe", but Mrs Merkel is said by the magazine to have made clear she will withdraw her support for the UK's continued EU membership if he continues to push for migration reform.

"If you're going to have a sensible single market, if we want to compete with the Americans and the Chinese and so on and modern world, we need the free movement of labour," he told BBC's Sunday Politics.